Lost Decade Warnings Surface on Polish Deflation Threat
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Poland needs to cut interest rates to dodge the deflation trap that has condemned Japan to two decades of economic malaise, Union Investment TFI SA said.
“If we don’t react now, there’s a risk of getting trapped in a Japan-like scenario of prolonged deflation, which we may not exit for years,” Dariusz Lasek, who helps oversee the equivalent of $2.9 billion as the head of debt investments at the Warsaw-based fund, said by phone yesterday. “The rate-setting council has a weapon, it can cut rates, but as time passes this weapon loses its power to impact inflation expectations.”